May 29, 2024
Crypto Theft Recovery Hits $674M in 2023
Latest Cryptocurrency News

Crypto Theft Recovery Hits $674M in 2023

In 2023, cryptocurrency losses due to hacks and scams amounted to $2.61 billion, marking a 27.78% decrease from 2022’s $3.6 billion. PeckShield, a blockchain security firm, reported that over $674 million was recovered, comprising 25% of the stolen crypto from 600 large-scale hacks.

The recovery efforts notably increased compared to 2022 when only around $133 million was retrieved. Active negotiations with hackers and the rise of bug bounty programs contributed to the improved recovery.

“Engaging in active negotiations with hackers can lead to the return of stolen funds. […] Implementing bug bounty programs or on-chain sleuthing to identify hackers and vulnerabilities in the system can enhance security.”

Collaboration with centralized exchanges, Tether, and law enforcement also played a role in freezing funds when detected. Flash loan attacks accounted for 40% of hacks in 2023, and despite advancements in DeFi security, 67% of losses occurred in the decentralized finance sector, with 33% in centralized finance. Hacks constituted 58% of losses, while scams made up the remaining 42%.

While Bitcoin traditionally dominated illicit transaction volume from 2018 to 2021, a shift occurred in 2022 and 2023, with stablecoins taking a larger share of illicit transaction volume. This diversification indicates that malicious actors are expanding their focus beyond Bitcoin.

The decrease in losses, increased recovery efforts, and shifting patterns in targeted cryptocurrencies suggest evolving strategies in the crypto security landscape. Despite challenges, such as ongoing risks in DeFi and emerging attack vectors, the industry is adapting with proactive measures and collaborative approaches to enhance overall security. The data underscores the importance of continued vigilance, innovative security solutions, and industry cooperation to mitigate risks and protect users from the evolving threats within the cryptocurrency ecosystem.

Image by Freepik

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